As the New Year begins, many leaders turn their attention to strategic planning. However, there are several mistakes that can hinder the development of a successful strategy. In this 2-part series, we will explore strategic planning mistakes and offer insights on how to avoid them to create a strategy that delivers the desired results, revenues, and impact.
Dreaming Too Big.
We’re the first to encourage leaders to dream big, but when it comes to annual strategic planning, it’s important to add a healthy dose of realism about what you can really expect to accomplish in the coming year. Being realistic forces you to choose priorities. Yes, you can have it all – eventually. But trying to do it all this year will cause stress, overwhelm and a lot of half-finished projects.
Ironically, when you and your team focus on only one to three key priorities, you’re more likely to accomplish things in other areas as well. That’s because when everyone on the team is clear about what matters most, they’re less stressed, take less time to make decisions and can more quickly iterate and innovate as projects evolve.
Focusing on fewer key goals also has a compounding effect on confidence and efficiency. When your team isn’t overloaded with too many demands, they have time to think about how to reach their goals most effectively. When time is scarce, however, people jump straight into doing, avoiding the planning and prioritization stages that are essential for effective collaboration, efficiency, and innovation. If you’ve chosen truly high leverage goals, however, the spillover effects of achieving them will have a positive domino effect in other areas.
Likewise, beware of constantly rolling over strategic objectives from year to year. This can cause organizational blind spots that tank innovation and, ultimately, success. When choosing your priorities for the year, we take our clients through a process of listing all their frustrations, grouping them together in themes, and looking for common root causes. This process takes the better part of two days, but it’s an essential part of starting with fresh eyes each year to look for what really matters most in the current environment.
Dreaming Too Small.
Many leaders fall into the trap of letting their current level of knowledge about “how” things are done limit their decisions about “what” they want to achieve or even the “why” behind those goals in the first place. This can lead to a narrow-minded approach to strategic planning, where the focus is solely on figuring out the “how” instead of considering the bigger picture. This tendency is often a result of strong skills in goal setting, prioritizing, and strategizing, but can lead to unconsciously ruling out potential goals that may not seem immediately achievable. It is important for leaders to consciously separate the different parts of the strategic planning process (slowing down to speed up) and consider the “what” and “why” before diving into the “how.”
Here’s an example: A manufacturing client we worked with had revenues of about $7 million annually and had grown about 12% each year over the last 5 years. Their strategic planning was initially focused on ensuring another 12% growth, but we could tell by the energy of their team, that this goal did not inspire them. In fact, it felt like a slog. By working with them to expand their vision from what they knew how to do (12% growth), to what they really wanted to do (triple their revenues and be a fun, creative and exciting place to work), we helped them design strategies to grow the company to $30 million over the next three years.
As you embark upon your visioning process for the coming year, step beyond what you know you can do, and allow yourself and your team to imagine what you would really love to do. Where are you holding back from stating what you really want just because you don’t know how to get there? What would you do if you knew you couldn’t fail? What would excite you to be able to achieve by the end of this year? In three years? In five years? In ten? Research shows that people tend to overestimate what they can do in one year, but underestimate what they can accomplish in 5 or 10 years. By designing your strategy planning process around bigger dreams, you are far more likely to harness the kind of passion, imagination and creativity that fuels resilience, excellence, results, wellbeing and impact long term.
Strategic Planning Without Your Team
Strategic planning should never be done without input from people at every level of the organization. Top-down planning is old school – and ineffective. By involving the people who will be responsible for achieving the goals envisioned in their creation, you’re far more likely to have them engaged as willing partners, rather than “forced labor”. More importantly, you’ll get more insight into all the reasons the goals you think are important don’t matter or why your brilliant strategies won’t work. No one really loves to hear this type of feedback, but the most effective leaders seek it out because they know strategies dreamed up in the executive suite seldom fare well if not tempered by data and input from the front lines.
So, if your annual strategic planning happens at a fancy retreat somewhere and involves mostly drinking fine wine and preaching to the converted, there’s a good chance that your best laid plans won’t survive contact with reality. If leader bonding is one of the key purposes of these retreats, that’s fine. Just make sure that you’ve built processes into your planning cycle that involve getting input from the people who will be responsible for achieving the actual outcomes. You need to gather broad perspectives to discover and avoid blind-spots in your strategy and priorities.
Not Supporting Goals with Resources (& Systems).
Creating change of any kind takes time, money, or both. This seems obvious, but you’d be amazed at how many businesses put together strategic plans filled with audacious goals and little thought for the resources required to achieve them.
Thinking through the time and money needed to achieve all the goals on your list can feel like a tedious part of the planning process, but it’s essential. It forces you to come back down to earth and think more realistically about what you are truly committed to doing in the coming year. This is a critical step in the prioritization process. You are far better off making sure you have the time and resources to follow through on one major goal, than starting ten — and not be able to complete any of them.
If this sounds like a public service announcement from Debby Downer, don’t despair. We’re not asking you to give up your dreams. When you keep your eye on the long-term vision and purpose of your business, facing the resource realities of execution becomes a catalyst for creativity and innovation. It also helps you to wrestle a bit more deeply with what matters most.
After looking at the resource realities of executing on your strategic priorities, dig deeper by asking these questions:
- Which goals would represent the biggest return on your time and money investment?
- Which ones will have a positive domino effect in your team or the business?
- If you only had the time and resources to do one thing well in the coming year, what would you choose?
- How much impact would it have on laying the foundations for your long-term vision?
Lack of Support for Follow-Through.
Creating a strategic plan is a great first step, but nothing happens if you don’t support your team to focus and follow through. Realizing the objectives set out in your strategic plan involves change. You and your team need to do things differently to achieve different results. The challenge with this is that everyone’s time is already spoken for because you’re all caught up in the whirlwind of business as usual.
To overcome this status quo vortex, leaders need to adopt the wisdom of small business guru, Michael Gerber. Gerber’s business transformation advice centers around helping leaders to carve out time to work “on” their business instead of just “in” their business. Working “on” the business involves things like culture design and alignment initiatives, strategic planning, and project management, but it also involves allocating time for the change management side of achieving your organization’s goals. Things like communicating the vision (over and over again), dealing with resistance (more than you think you should have to), and listening (really listening) to the input of your team.
Gerber also emphasizes the importance of creating systems for everything in your business. But creating a system is the easy part – it’s getting people to develop the habit of using the system consistently that’s hard. Effective leaders expect this. It’s a natural part of learning and change. Your people won’t get it the first time. And no, this doesn’t make them stupid and lazy or mean that they just don’t care as much as you do. It just makes them human. It’s your job as a leader to be there to support their learning for as long as it takes them to make the change. If they’re not getting it, chances are it’s more your fault than theirs. Work “on” yourself by skilling up in how to lead learning and manage change.
In conclusion, strategic planning is an important process for leaders to develop and implement effective plans for their organizations. However, it is important to avoid pitfalls that can hinder the success of these plans. With careful planning and a clear vision, leaders can set their organizations up for success in the coming year and beyond. Now check out part 2!